New home sales in the United States rebound modestly in July; soaring prices

WASHINGTON, Aug.24 (Reuters) – Sales of new single-family homes in the United States rose in July after three consecutive monthly declines, but housing market dynamics are slowing as housing prices soar amid tight supply shuts potential buyers out of the market.

Tuesday’s Commerce Department report showed builders were increasingly pre-selling homes, with around 75% of homes sold last month not yet starting or under construction. The report follows this month’s announcement that building permits for single-family homes fell in July, while homebuilder confidence fell to its 13-month low in August.

“As we have seen in many different housing indicators, the New Home Sales report recently showed a significant cooling in the housing market compared to a period of robust activity at the end of last year. and early this year, ”said Daniel Silver, economist at JPMorgan in New York.

New home sales rose 1.0% to a seasonally adjusted annual rate of 708,000 units last month. The sales pace for June was revised to 701,000 units against 676,000 units previously reported.

Economists polled by Reuters had forecast new home sales, which account for 10.6% of US home sales, rising to 700,000 units in July. Sales fell 27.2% year-on-year in July.

Last month’s gain in new home sales was fueled by a 1.3% increase in the populated south and a 14.4% jump in the west. Sales plunged 24.1% in the Northeast and declined 20.2% in the Midwest. The median price of new homes climbed 18.4% from the previous year to $ 390,500 in July.

Sales were concentrated in the price range of $ 200,000 to $ 749,000. Sales in the less than $ 200,000 price range, the sought-after segment of the market, accounted for only 1% of transactions.

Historically low mortgage rates are boosting housing demand, which was further boosted by the COVID-19 pandemic as millions of Americans worked from home and took classes online. But supply has lagged, with builders constrained by soaring lumber prices as well as shortages of other building materials, appliances, land and labor.

Whole timber prices have fallen sharply from record highs in May, land and labor shortages persist.

There were 367,000 new homes on the market, up from 348,000 in June. Houses to be built represented around 28.6% of the supply. At the pace of July sales, it would take 6.2 months to liquidate the supply of homes on the market, compared to 6.0 months in June.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

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